Rupee makes strong comeback, rises 20 paise to 69.91 vs US dollar

Mumbai: The rupee on Monday staged a good recovery to end higher by 20 paise at 69.91 against the US currency on bouts of dollar selling by exporters and corporates.

The domestic currency recouped early losses and withstood the headwinds of surging crude prices and trade deficit worries.

Excess volatility and movements in the US dollar had a major impact on the domestic currency.

The domestic unit hit a low of 70.24 before rebounding in late afternoon deals.

India's trade deficit soared to a near five-year high of USD 18 billion, raising concerns on the current account front.

Also, global crude prices surged after a brief consolidation largely supported by signs that US sanctions on Iran, the third-biggest producer in the OPEC, are already reducing global crude supply.

The benchmark brent was up 60 cents a barrel at USD 75.33 in early Asian trade.

The market participants are now focusing on the upcoming Jackson Hole Central Banking Symposium and also closely watching developments of the US-China trade war and its implications on global growth and influences on Fed monetary policy, a forex dealer commented. The sharp fall in rupee yesterday was clearly unexpected, he added.

Meanwhile, the US dollar continued to enjoy the Fed's optimism from the FOMC meeting minutes expectaion of monetary tightening even investors awaited further moves in global trade disputes despite growing US political uncertainty.

The Indian economy is expected to grow by around 7.5 per cent in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices, Moody's Investors Service said.

In its Global Macro Outlook for 2018-19, Moody's said the run-up in energy prices over the last few months will raise headline inflation temporarily but the growth story remains intact as it is supported by strong urban and rural demand and improved industrial activity.